Landed property or flat, this is the question constantly surround property investment scene or homebuyers. It’s also the most common asked question. Landed property generally has a bit of own land in the front entrance while flat building doesn’t have any land for the homeowner.
Some states apartment is inconvenient since it’s high rise and far away from car park. Some assert that landed property isn’t as safe as apartment since it is much easier to access. Some may also say that maintenance of flat is higher.
There are some truths about these statements but these aren’t all the truth. Determined by what exactly do you want in return. Let us examine it one by one from standpoint of property investor.
Freedom of property –landed property Singapore is generally associated with having a property and the freedom to do anything you want at any time on your property. But as an investor, through capital appreciation or rental income, you will need to consider if these factors could result in the rate of return? Probably this can be best explained in the next stage.
Not a great rental property – Landed property is obviously higher in cost and monthly installment. For a good terrace house in a fantastic place can cost around half a million – shoot Bandar Puteri as an example (a township name in Malaysia). The monthly installment might be as large as RM2.5K. So as to create positive cash flow, you want to rent out in RM3K.
Landed properties tend to love more in long term – this isn’t new if your grandparents owned some land back because the 60s, you’d have noticed the price up a few hundred times in the time they purchased it. Much like landed property, since the property get scarcer, and population grows, the property cost will go up as well. The quicker the population grows, the faster the appreciation.
By comparison, condominium or apartment unit does not appreciate as much as property properties only because the “property” is divided into a lot of smaller parcels. The appreciation, if any, is only spread out to all of the unit owners. Another factor likely has to do with property reuse price. More cost is involved in reusing the land with flat constructed on in comparison with a landed property that’s usually 2-3 stories tall.